After a 2½-year legal battle, the US controls supplier Opto 22 has settled a lawsuit brought against it by Schneider and Square D, who had accused it of infringing patents covering Web- and network-accessed controllers.

The terms of the settlement, which was reached early in 2003, have not been disclosed, but Bob Engman, Opto 22`s founder and president, has recently issued a statement on the case. He says that when Schneider filed the lawsuit in February 2001, "we considered settling immediately, to avoid taking on a multi-billion dollar behemoth like Schneider, but we chose instead to engage in this litigation as a mater of principle, believing strongly that the entire industry should be free to use open standards and technologies that are clearly in the public domain."

Engman says the suit came as a surprise "mainly because it`s just not the way we are used to doing business". Opto 22 introduced the first optically isolated modular I/O system 25 years ago, and when competitors later began to offer similar products "we viewed it as positive because it validated our concept and helped to establish an industry standard," he says.

The legal case cost Opto 22 millions of dollars, but eventually the company concluded that the patent litigation process is "at best, a broken-down system, and that small companies cannot endure the huge legal bills and endless distractions that inevitably result from such litigation."

Engman says that "though we were, and still are, confident that our position was both legally and morally just, we owed it to our customers, partners and employees to make every effort to bring an end to this litigation and to get back to what we`ve been doing since our founding in 1974.

"Fear of litigation is stifling innovation as more and more companies decide to compete in the courtroom and not in the marketplace," Engman warns. "Attorneys and consultants are encouraging their clients to set up intellectual property departments with the idea of making money not through earnest endeavours to produce and offer quality goods and services, but through continuous litigation and intimidation."